Strong dollar takes down oil, gold, and crypto

• US SPR hovers around 362 million barrels, down from 593 million seen at beginning of 2022
• Gold ETFS net purchases post largest one-day increase since mid-April
• Bitcoin falls to a 2-month low

Oil

Crude prices are getting punished as the dollar rally extends.  Several oil headlines have provided mixed signals for energy traders; Iraq and Canadian supplies have seen some disruptions, while Iraq signals that there will be no additional reduction from OPEC+.  Iraq oil minister Hayan Abdel-Ghani also noted that Iraq cannot reduce output further.

Oil is going to finish the week lower as crude demand concerns emerged from both the US and China. News that the US could potentially refill the SPR should mean that we won’t make fresh monthly lows, but that doesn’t mean we can’t see prices soften a bit further here.

Gold

The strong greenback has triggered a modest pullback for gold.  The precious metal appears to be facing rather strong support around the $2000 level, but that could easily be breached if king dollar makes a return next week.

The institutional world is buying gold again, posting the biggest one-day increase with ETF purchases in almost 2 months.  The institutional world hasn’t been the best bettors on bullion as they were sellers into a good part of the rally that has happened over the last year.

Gold just needs to survive this dollar rally and it should benefit from steady safe-haven flows as Wall Street worries over geopolitical stress, a debt ceiling impasse, and potentially further regional banking issues.

Crypto

Bitcoin is weakening as the dollar surges and Wall Street grows nervous over a handful of macro risks.  Bitcoin is still subject to further downside pressure until we get some regulatory clarity in the US.

Coinbase is making strong efforts to make sure regulation doesn’t become crippling and formed a Global Advisory Council.  The Council will consist of Former Senator Patrick Toomey, Former Congressman Tim Ryan, and Former Congressman Sean Patrick Maloney. This council will work alongside the Coinbase Asset Management Academic and Regulatory Advisory Council, which includes Jay Clayton, Former SEC Chair Courtney Elwood, Former CIA General Counsel

Coinbase has a lot of respected former lawmakers and regulatory heads on their side and that should lead to optimism that crypto will eventually play a bigger role in the financial system.

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